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AMD Lowers Q2 Forecast, Shares Tumble

Weak sales in China and Europe are driving revenue lower


Fallout from the global economic slowdown will impact chip sales at Advanced Micro Devices (NYSE:AMD).

Citing lackluster sales in Europe and China, the company said it now expects second-quarter revenues to fall 11%, compared to the first quarter. It had previously said second-quarter revenues would dip by just 3%, CBS noted.

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Investors did not like the guidance and AMD shares dropped more than 8% in pre-market trading on Tuesday.

The diminished outlook surprised analysts who had expected the company to report earnings up about 3% to $1.69 billion for the quarter.

The chip-maker will issue its second-quarter numbers on July 19.

AMD’s warning prompted analysts to cut their price targets for the stock. A Citigroup (NYSE:C) analyst trimmed his estimate for AMD shares from $10.50 to $8, but expected the company’s picture to brighten later in the year.

The company is facing increased pressure not only from the global slowdown but from chip-making competitor Intel (NASDAQ:INTC), which recently introduced its new line of Ivy Bridge processors.

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